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Wednesday, November 23, 2011

Ezra Klein, what about that Paradox of Power?

It's not often that I feel impelled to dispute a conclusion with Ezra Klein, but today is one of those occasions.

Noting the irony inherent in the fact-set that a) Republicans continue to make sympathetic noises about the Bowles-Simpson plan, b) Obama has floated plans that are both less substantive and to the right of Bowles-Simpson, and c) Republicans reflexively reject -- nay, demonize -- anything with Obama's stamp on it, Klein makes a case that Obama should press "reset" and throw his weight behind the plan:
Either way, there’s no reason Democrats should be rejecting Simpson-Bowles on behalf of the Republicans. And, to be fair, that’s not all that’s going on here: The Obama administration doesn’t like the defense cuts or Social Security reforms in Simpson-Bowles, and they’re skeptical that the tax reform process could really generate as much revenue as the document promises. So their thinking was that they could work off of the Simpson-Bowles proposal and come out with something better.

That’s pretty much what they tried to do in April. But because that plan had Obama’s name on it, it was dismissed as a liberal nonstarter. Their strategy, in other words, was a huge failure, and over the past year, they’ve watched the deficit debate move far, far, far to the right.
Let's leave aside for the moment the question of whether Obama stands to gain now by embracing Bowles-Simpson.  I think Klein misconstrues the cause of Obama's "huge failure" in the spring and summer of this year. The failure lay not in the composition of his plan nor in his abstention from wholehearted advocacy of Bowles-Simpson.  It stemmed from his agreement to negotiate under the debt ceiling deadline, which he not only accepted but embraced as "a unique opportunity to do something big."
No one knows better than Klein why Obama kept his mitts off Bowles-Simpson early in the year and did not immediately offer his own detailed alternative template.  Thanks in the first instance (I think) to Matt Yglesias, the liberal blogosphere had been kicking around since December 2010 what Klein later called the paradox of power -- the fact that presidential advocacy polarizes a debate, hardens the opposition. Obama himself came out with an endorsement of this theory in February, while the Gang of Six was trying to hammer out legislation based on Bowles-Simpson with his low-key approval:
“If you look at history of how these deals get done, typically it’s not because there’s an Obama plan out there. Its’ because Democrats and Republican are serious about dealing with [these issues] in a serious way,” the president said. “This is not a matter of you go first or I go first,” he said before describing a goal of “everybody…ultimately getting in that boat at the same time so it doesn’t tip over.”
The "all get in the boat together" imperative was borne out in late July. At that point, after Boehner had bolted from a grand bargain in progress, the Gang of Six suddenly resurfaced with the outlines of a Bowles-Simpsonesque plan yielding more new revenue, $1.2 trillion over ten years, than Obama had negotiated with Boehner.  Many prominent Republican senators indicated support.  Then Obama praised the plan, and over it keeled:
--A Senate Republican leadership aide emails with subject line “Gang of Six”: “Background guidance: The President killed any chance of its success by 1) Embracing it. 2) Hailing the fact that it increases taxes. 3) Saying it mirrors his own plan.”
This after Republicans had begged and baited the President to get on board with the Gang of Six in February, prompting his "all get in the boat" comment. Here was Klein's take:
In the end, the problem for the president is that though the public sees him as the player with the responsibility to make a deal, there’s not much he can do to persuade the opposition party to cut a deal it doesn’t want to cut. In the words of Allen’s Senate aide, going public “kills the deal” because it becomes associated with the president, and the opposition party is not supposed to associate with the president. Not going public kills the deal because it doesn’t create any pressure on the opposition party to bargain. But the reality is that nothing here is killing a deal. The deal was never alive to begin with.

Absent a will to compromise, born out of some combination of a balance of political interests and a will to put country before party, the question becomes: which side has the leverage, and how can that party maximize its leverage either by allowing the other side to save face, or by maximizing the political pain it will incur by failing to strike a deal, or both?

It was by misplaying the leverage game, not by endorsing or failing to endorse or proposing or failing to propose specific plans, that Obama dug himself a hole. Klein, like most progressives, was happy* back in April when Obama countered the Ryan plan with his own, sketchier and lighter on revenue than Bowles-Simpson though it may have been.  Obama went astray when the House voted down a clean debt ceiling bill and Obama accepted the Aug. 1 deadline for negotiating at least $2.6 trillion in spending cuts. At that point, I've argued before, I believe that Obama should have signaled that he was happy to negotiate a grand bargain of $4 trillion or more in deficit reduction, but that it would have to include $X in new revenue -- and that such a negotiation had nothing to do with the debt ceiling.  If the GOP refused either to cut a "balanced" deal before Aug. 1 or to offer a clean debt ceiling hike, Obama should have gradually orchestrated introduction of the 14th Amendment option, and exercised it if necessary.  It was the combination of GOP willingness to trigger default, and his unwillingness to go to the brink or over it into uncharted 14th amendment territory, that created the apparent cave.

Apparent cave. Maybe I was wrong on this too. We won't know until the game is played out. Now, with the political pain somewhat evenly distributed because Obama was willing to let the supercommittee fail and the defense-heavy sequestered cuts go into effect, the leverage is on the other foot. Republicans don't want the defense cuts to start happening in 2013, and they don't want the Bush tax cuts to expire at the end of 2012. Obama is therefore now in a position to say what he might have said in April: call me when you're ready to propose a "balanced" deficit reduction package that includes $X in new revenue: 
We need to keep the pressure up to compromise -- not turn off the pressure. The only way these spending cuts will not take place is if Congress gets back to work and agrees on a balanced plan to reduce the deficit by at least $1.2 trillion. That's exactly what they need to do. That's the job they promised to do. And they've still got a year to figure it out.

Although Congress has not come to an agreement yet, nothing prevents them from coming up with an agreement in the days ahead. They can still come together around a balanced plan. I believe Democrats are prepared to do so. My expectation is, is that there will be some Republicans who are still interested in preventing the automatic cuts from taking place. And, as I have from the beginning, I stand ready and willing to work with anybody that's ready to engage in that effort to create a balanced plan for deficit reduction.
If the President does not get too squishy in what he's willing to accept as a "balanced" plan, and if he is willing to let all the Bush tax cuts expire if the Republicans will not deal on his terms, then he has the whip hand.  He needs flexibility, not a more detailed blueprint. In brief, he needs at least $4 trillion in deficit reduction over ten years that includes $1.2--2 trillion in new revenue (compared, that is, to what we'd have if all the Bush tax cuts were renewed).  The electorate understands as much of that as they're ever going to understand, regardless of plan details -- they are already behind Obama''s idea of balance.  It would be easier to get Obama's targeted tax hikes and loophole closures, which fall almost entirely on the wealthy and corporations, through Congress than it would to enact comprehensive tax reform -- which, as Alan Blinder pointed out recently, has historically been either revenue neutral or revenue negative.

Tom Friedman, also touting Bowles-Simpson, complains that Obama's plan lacks substance, citing Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, complaining,  “It is watered-down Simpson-Bowles,,,,Most people don’t even know it exists.”   Well hell, I'm sure that most Americans also don't know that Bowles-Simpson exists. And if Obama did prefer Bowles-Simpson to his own plan, he'd increase the odds that any ultimate legislation looked more like it than like his own outline by once again keeping his hands off it.

Perhaps I'm wrong on this. Perhaps the bipartisan imprimatur of Bowles-Simpson would help Obama either get legislation passed or clothe his own position more thoroughly in centrism.  But I think the main question is how Obama uses his leverage, not what plan he puts up on the board.

* Or so I recall. Try searching that dreadful WaPo website.

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